Normally used by institutional investors and arbitrageurs,' Program trading' is the purchase or sale of large quantities of stock triggered by computer programs. These programs are designed to buy or sell stocks automatically when prices hit predetermined levels. Such large and sudden trades can have a dramatic effect on the overall market. According to one theory, the stock market crash of 1987 was caused in part by program trading triggered by falling stock prices. Circuit breakers, which halt trading for a period of time when prices fall dramatically, have since been instituted by the major stock exchanges to help prevent another crash of that type.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). program trading. Retrieved September 21, 2026, from http://smartdefine.org/program_trading/definitions/1161305 |
| Chicago | Barry Goldsmith. 2010. "program trading" http://smartdefine.org/program_trading/definitions/1161305 (accessed September 21, 2026). |
| Harvard | Barry Goldsmith 2010, program trading, Smart Define, viewed 21 September, 2026, <http://smartdefine.org/program_trading/definitions/1161305>. |
| MLA | Barry Goldsmith. "program trading" 21 October 2010. Web. 21 September 2026. <http://smartdefine.org/program_trading/definitions/1161305> |